The Taxation Policy Of Bimaru States Economics Essay

The term BIMARU was foremost coined in mid 1980s by Ashish bose an economic analyst of India. He referred the term BIMARU in paper submitted to Prime Minister MR. Rajiv Gandhi. BIMARU is an acronym used for four north Indian provinces of India viz. Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. BIMARU is a related to Hindi word “ Bimar ” which means ill. These provinces are referred as BIMARU provinces because of their ill growing rate and low part to national income of India. But soon the scenario is wholly changed for BIMARU provinces they are no longer known as BIMARU because of their high growing rate and their part in economic development of India. Bihar is foremost in this growing rate figures with 11.3 % of GDP dawdling merely behind Gujarat ( one of the developed provinces of India ) . The 2nd in this race is Uttar Pradesh with GDP growing rate of 8.17 % , it is grew at 6.29 % between 2004-2009 stopping point to 7 % which is regarded as international criterion for national economic system. The 3rd in the race is Rajasthan with GDP growing rate of 5.4 % . In the twelvemonth 2010-11 the growing of GDP over the old twelvemonth of Rajasthan is 10.97 % . The last but non the least is Madhya Pradesh the 2nd populated province of India, the growing rate of GDP over the old twelvemonth for Madhya Pradesh is 8.17 % in 2011 that clearly shows the growing chances for the province.

HDI ( Human development index ) –

The international index that used to mensurate and rank states harmonizing to economic and societal development is termed as Human development index. The three chief factors to look into the index is standard of life, literacy degree and life anticipation of state people. Over the 30 old ages from 1980 to 2010 HDI rate in India is increased from 0.320 to 0.519 with rise of 62 % but in malice of this India ranks 134 among 187 states in HDI of 2011 the chief ground for this is the entire sum of GDP that the state posses is non used for the development of the people and harmonizing to assorted economic expert corruptness is regarded as chief hurdle for the state dawdling behind in Human development index. HDI is besides measured for provinces, small towns, towns etc. by province authorities and the local organisation.

HDI-

Harmonizing HDI study of India 2011, the HDI in India rose by 21 % in malice of the fact that state is dawdling behind in confronting challenges like sanitation, nutrition and wellness. Harmonizing to study, 14 provinces of India holding higher HDI than the national norm of 0.47 % but the BIMARU provinces are lying behind the mean degree. The following tabular array shows the HDI value and ranking of BIMARU states-

BIMARU States

HDI ( 2007-08 )

Rank

HDI ( 2011-12 )

Rank

Bihar

0.367

21

0.487

23

Madhya Pradesh

0.375

20

0.505

22

Rajasthan

0.434

17

0.564

18

Uttar Pradesh

0.380

18

0.520

19

The study besides tells that the betterment in educational index is greatest in some of the BIMARU provinces like Madhya Pradesh, Uttar Pradesh and Rajasthan but 75 % of family of Madhya Pradesh, Rajasthan and Bihar do non hold toilet installation the study besides shows betterment in criterion of life of people with 66 % of people shacking in Pakka houses it besides highlighted the fact that 60 % of hapless are reside in the provinces like Bihar, Madhya Pradesh, Uttar Pradesh and Orissa. The study consequences clearly indicates that in malice of high turning rate of BIMARU provinces it lags far behind in certain human development factors.

State domestic product-

State domestic merchandise ( SDP ) means the entire sum of goods and services produced by a province during fiscal twelvemonth. As GDP gives the mentality of state as whole SDP give more forced about economic developments of province. Harmonizing to latest informations released by Indian authorities Bihar stands as a province with highest economic system growing at rate of 13.1 % for the twelvemonth 2011-12 which shows high addition of 20.39 % from old twelvemonth. Madhya Pradesh is 2nd by accomplishing 18 % agribusiness growing rates and with SDP of 11.98 % Rajasthan besides turning at fast rate with a growing of 22.95 % over the old twelvemonth in 2010-11. Uttar Pradesh the largest populated province of India shows a 13.62 % addition in SDP over the old twelvemonth in 2011-12.

Tax policy of BIMARU states-

Bihar introduced a new industrial inducement policy in the twelvemonth 2011 this policy was formed after audience with chief industrial units of Bihar. The chief object of this policy is to pull domestic every bit good as international investing. Under this policy Bihar authorities proposed for allowing 100 % freedom from enrollment fees and stomp responsibility and capital subsidy for industrial units the chief aim of this policy is to hike the growing of the province with big sum of employment coevals. Madhya Pradesh besides introduces new revenue enhancement policies to bring forth gross and hike up the industrial growing, late authorities of Madhya Pradesh present IT investing policy to pull IT units. Under this policy particular inducements will be provided by authorities in puting up IT industries and high-tech IT parks in private sectors as the chief aim of this policy is to do M.P as another IT hub as it generates a batch of gross to the authorities. The authorities of Rajasthan introduces Engendering policy in twelvemonth 2006-07 as its economic system has 13 % of net domestic merchandise contributed by carnal farming other than this many of the policy introduced by Rajasthan authorities focal points on employment coevals and industrial development. In 2011 Uttar Pradesh authorities introduced substructure and industrial investing policy to pull investing and to bring forth employment the chief aim of the UP authorities from this policy is to hike up province industrial development rate from 10 to 11.2 % by supplying inducement to SMEs and other industrial units.

SEZ policy-

Particular economic zone ( SEZ ) is a peculiar geographical country under a province that posses different revenue enhancement ordinance and duty regulations. It is introduced by a state to pull foreign direct investing and to increase the industrial growing. Presently there are 143 SEZ operating in India and 634 are already approved by Indian authorities. SEZ are regarded as an of import portion for the development and growing of the province. The entire figure of SEZ runing in BIMARU provinces are 11 with none in Bihar because the resistance of State authorities. The policy of other province are-

SEZ units are exempted from electricity responsibility.

If the province electricity board is supplying electricity for SEZ unit so there is anterior agreement that electricity is provided with full power but it is non applicable in instance if electricity is provided through private participants.

All the units of SEZ are exempted to pay octroi responsibility, VAT, commercial revenue enhancement and any other Ce responsibility charged by province authorities.

Labour Torahs should be same for all units operates under SEZ.

All power to pull off the operation of SEZ is in the custodies of development commissioner of SEZ.

Clearance should be provided with immediate consequence to units that applied for the SEZ.

Political governance-

As we know that the development and growing of a province is really much depend on its political factor. The regnant authorities plays a major portion in it. Bihar is dawdling behind for many old ages in economic development with many provinces the ground behind that is lack of right policies of the province authorities. But after the leading of Mr. Nitish kumar the whole image becomes alteration with his effectual policies on reformation like investing in substructure, more accent on instruction and better wellness attention installations and with these the whole narrative speak with growing Numberss, Bihar is fastest turning province of India with growing rate of 13.1 % , between 2003-2008 the influx from tourer is besides increased from 61,000 to 346,000. Madhya Pradesh is known for its reforms in tourer industry in the recent clip it grow with rapid gait because of its policies in industrial sector that attract a batch of investing. The rate of GDP growing in Madhya Pradesh in 2011-12 is 12 % that clearly figure out its good administration policies. The economic system of Rajasthan is mostly depend on agribusiness and recent authorities besides make many reforms in the growing of these sector because of these it is counted in one of the biggest generator of comestible oil in India. Uttar Pradesh which is regarded as chief political platform for many leaders besides come out with success figure with the attempts of the province authorities in developing substructure undertakings in Noida, Lucknow and made it another IT hub after Bangalore. The province authorities of UP motivates little scale industry by supplying many inducements and with consequence of these big figure of little graduated table industry are situated in Uttar Pradesh as compared to other provinces. Uttar Pradesh is 3rd largest province in footings of SDP ( province domestic merchandise ) in India, all these shows a good leading by province authorities of Uttar Pradesh.

If we speaking about investing, Rajasthan and Uttar Pradesh are considered as safe part for investing because both had showed a rapid rate of growing in every facet HDI every bit good as SDP. Both provinces focus on policies that attract more and more investors by supplying revenue enhancement inducements and more significantly the province authorities of both province focuses on SEZ to pull investing. There are 4 operational and 11 approved SEZ in Rajasthan and there are 6 operational and 35 approved SEZ in Uttar Pradesh if there are more SEZ there will be more domestic every bit good foreign investing which provide a big infinite for competition with alleviation in revenue enhancements. So it is better to put in SEZ country instead than non SEZ country harmonizing to my point of position.